Tax & admin · 11 April 2017

Public sector contractors urged to confirm IR35 status

Some NHS workers are among the public sector contractors affected by IR35 rules
To avoid uncertainty and confusion surrounding newly implemented public sector rule changes, the Association of Independent Professionals and the Self Employed (IPSE) has advised contractors to check their IR35 status.

The body representing independent workers and the self-employed made the call amid concerns that many public sector contractors may find themselves in an inaccurate tax bracket.

A change to the way IR35 status determinations are made in the public sector, introduced on 6 April, means it is now the job of the public sector organisation itself to determine the IR35 status of contractor work, rather than the contractor themselves.

In future, if a public sector organisation considers work done by a contractor to fall in line with IR35, that organisation will apply taxes to the contractor in the same way it would with employees.

HMRC’s IR35 rules are a set of measures affecting individual workers? tax and national insurance contributions if contracted to work for clients via an intermediary a partnership, service company or one’s own limited company, for instance.

A new online tool, released last month by HMRC, was designed to provide clarity for public sector firms and agencies around IR35 status.

The Employment Status Service (ESS) tool saw its rollout delayed, and many public sector bodies gave since adopted a blanket approach, incorrectly classifying all contractor work inside IR35 rules.



Fred Heritage was previously deputy editor at Business Advice. He has a BA in politics and international relations from the University of Kent and an MA in international conflict from Kings College London.

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